Loans for use outside HK were down 2.2%.
Barclays notes that the loan contraction continues from weaker trade-related loans. The HKMA’s August monetary statistics showed system loans declined by 0.4% m/m led by loans for use outside Hong Kong down by 2.2% m/m and trade finance which fell by 1.2% m/m.
"Loans for use in HK rose by 0.5% m/m. We believe the decline in trade-related loans and loans for use outside HK which are Mainland related is because of RMB deprecation expectations and concerns over slowing economic growth in China, which is affecting loan demand in Hong Kong," adds Barclays.
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